Mumbai: Capital market regulator Securities and Exchange Board of India (Sebi) has barred six individuals and entities from dealing in the securities market for a year for involvement in circular trading in the shares of Sun Infoways.
Govind Chichani, Kamlesh Jain, Abhayraj Shukla, Mayrose Capfin Pvt Ltd, Adhunik Finance Pvt Ltd and RS Investments have been prohibited from buying, selling or otherwise dealing in securities.
The Sebi had conducted investigation into irregular transactions in Sun Infoways scrip following a sudden fall in its price during 5 February to 2 May 2001.
It had initiated actions against the company, its related entities, certain stock brokers and a few of the clients for violation of concerned rules.
Investigation had revealed that circular/synchronized trades were executed between certain brokers, trading on behalf of their clients, during the investigation period.
The clients included the six individuals and entities, and Sebi had served show cause notices to them in 2008.
After going through their replies and matters pertaining to the case, Sebi said in its order that “clear pattern of circular trading emerges in the trades carried out among these clients during the investigation period.
“Each leg of the circular trades impacted the price of the scrip and/or gave a misleading appearance of trading in the scrip.”
It said the buy and sell orders were closely matched.
“While the time difference was minuscule, the order price and quantity matched exactly. Moreover, the trades were reversed within one minute of placing order (on two occasions) ...,” the regulator added.